Understanding Value Stocks
A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company's future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.
Below is a list of notable value stocks in the energy sector:
- Diamondback Energy (NASDAQ:FANG) - P/E: 7.98
- ConocoPhillips (NYSE:COP) - P/E: 9.42
- Sunoco (NYSE:SUN) - P/E: 6.29
- YPF (NYSE:YPF) - P/E: 5.66
- Star Group (NYSE:SGU) - P/E: 6.51
Diamondback Energy's earnings per share for Q1 sits at $5.2, whereas in Q4, they were at 3.63. Most recently, ConocoPhillips reported earnings per share at $3.27, whereas in Q4 earnings per share sat at $2.27. Sunoco's earnings per share for Q1 sits at $2.32, whereas in Q4, they were at 0.95. The company's most recent dividend yield sits at 7.92%, which has increased by 0.23% from 7.69% last quarter.
Most recently, YPF reported earnings per share at $0.64, whereas in Q4 earnings per share sat at $1.0. Its most recent dividend yield is at 1.0%, which has increased by 0.47% from 0.53% in the previous quarter.
Most recently, Star Group reported earnings per share at $1.75, whereas in Q1 earnings per share sat at $0.32. Most recently, the company reported a dividend yield of 5.58%, which has increased by 0.16% from last quarter's yield of 5.42%.
The Significance: A value stock may need some time to rebound from its undervalued position. The risk of investing in a value stock is that this emergence may never materialize.
